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Inter-Ethnic Redistribution and Human Capital Investments

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  • Leonid V. Azarnert

    ()
    (Bar Ilan University)

Abstract

This article analyzes income redistribution in the inter-ethnic context. The model shows that redistribution in favor of less prosperous ethnic minorities raises fertility among the unskilled minority recipients, lowers fertility among the contributing local skilled, slows human capital accumulation, and reduces the per-capita output growth. The analysis also demonstrates that income redistribution, although financed by taxes levied on the skilled, generates a mechanism that, via its disincentive effect on human capital investment, works strongly against another weak segment of society – the local unskilled. This may provide a purely economic explanation for antipathy toward minorities, especially, among less educated.

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File URL: http://www.biu.ac.il/soc/ec/wp/2009-01/2009-01.pdf
File Function: Working paper
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Bibliographic Info

Paper provided by Department of Economics, Bar-Ilan University in its series Working Papers with number 2009-01.

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Date of creation: Jan 2009
Date of revision:
Handle: RePEc:biu:wpaper:2009-01

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Postal: Faculty of Social Sciences, Bar Ilan University 52900 Ramat-Gan
Phone: Phone: +972-3-5318345
Fax: +972-3-7384034
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Web page: http://econ.biu.ac.il
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Related research

Keywords: redistribution; ethnic diversity; fertility; human capital; economic growth;

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Cited by:
  1. Leonid Azarnert, 2010. "Juvenile imprisonment and human capital investment," Journal of Economic Inequality, Springer, vol. 8(1), pages 23-33, March.
  2. Leonid V. Azarnert, 2010. "Après nous le Déluge: Fertility and the Intensity of Struggle against Immigration," CESifo Working Paper Series 3064, CESifo Group Munich.

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